At California Hospital, Red Flags and an FBI Raid

REDDING, Calif. -- Don Frank, a California lumber salesman with broad shoulders and a modest demeanor, had no reason to question his doctor's diagnosis of a serious heart problem.

Feeling discomfort in his chest after exercising, Frank decided in the summer of 2002 to see Chae Moon, the chief cardiologist at Redding Medical Center. At 46, married with two sons, Frank was worried about his health. His father -- a former patient of Moon's -- had died of heart disease at 51.

Don Frank considered the chain-smoking Moon a personal friend. They were members of the same golf club and often exchanged pleasantries on the course.

Moon gave Frank an angiogram, an ultrasound and some bad news: He said he had spotted plaque in Frank's left descending artery. "He told me, 'If that breaks loose, you could be dead before you hit the floor,' " Frank recalled.

Frank was shocked but quickly scheduled surgery, taking comfort in Redding Medical Center's excellent reputation. The 238-bed hospital overlooking the Sacramento River boasted that it did more open-heart surgery and cardiac tests than teaching hospitals twice its size. Just that summer the Joint Commission on the Accreditation of Healthcare Organizations awarded Redding a grade of 94, among the highest in the country.

All of that quickly changed in October 2002, a few months after Frank's surgery, when FBI agents raided the hospital looking for evidence that doctors were performing unnecessary tests and heart surgery on healthy patients, including Frank.

It took a whistle-blower to alert the FBI about what turned out to be one of the nation's worst examples of overzealous medicine. But warning signs about Redding were in plain sight for years, documents show. That they were ignored goes a long way toward explaining the breakdown in oversight of the nation's health providers.

The FBI's raid spawned waves of allegations that are still playing out. A criminal investigation was opened. Hundreds of civil lawsuits were filed. Redding's owner, Tenet Healthcare Corp., agreed to pay the federal government $54 million to settle allegations of unnecessary care, without admitting wrongdoing, and to sell the hospital or risk having it barred from Medicare. The hospital is now called Shasta Regional Medical Center.

Still later, Tenet said it would pay $395 million to 769 patients who said they underwent unneeded cardiac procedures at Redding. Moon's cardiology group also settled with patients, paying $24 million to 345 plaintiffs.

Separately, Moon agreed to a suspension of his medical license. He declined through his lawyer to comment, citing the criminal inquiry.

For years, warning signs at Redding Medical Center were missed by regulators and accrediting organizations. In the mid-1990s, researchers at Dartmouth Medical School reported that Medicare patients in Redding were twice as likely to have open-heart surgery as patients in San Francisco and other California cities. By 2002, the year Frank had surgery, the rate had nearly tripled.

"At the time, we wondered what was going on in Redding," said John E. Wennberg, the chief Dartmouth researcher.